Although Suncor has other significant upstream assets (including offshore assets in Norway, United Kingdom, East Coast Canada, and onshore North American production), the oil sands business is the primary driver of shareholder value and the cornerstone of growth.

We forecast large growth in free cash flow starting in 2017, as Suncor nears the end of capital spending for its Fort Hills project ($9.8 billion total project cost) and given Suncor’s continued improvements in upstream (oil sands) operating costs and down-stream (refinery) utilization rates.

We think Suncor’s financial strength and resilient business model have been on full display during the current crude oil bear market.

Suncor has a long and successful track record of counter-cyclical acquisitions by acquiring assets at the bottom of the cycle. The current oil bear market has given it the opportunity to add key strategic assets that we think are very accretive to its net asset value.